In mid-2014, we introduced the EMSI Job Forecast, a prediction of the previous month’s change in employment three days before the BLS releases its initial number. The goal of our forecast, which is based on a number of leading labor market indicators and data releases, is to give an early look at the current state of the labor market.
We release the job forecast the Tuesday before every monthly jobs report.
The January Job Forecast: +227K Jobs
January was another strong month for job growth, according to EMSI’s forecast. Our model shows that employers added 227,000 net jobs in January, an estimate that includes total non-farm payroll employment (government included). When factoring in the BLS’s revised numbers, this would be the 12th straight month, going back to February 2014, with at least 200,000 jobs added and would carry the market’s solid job growth into the new year.
What’s Behind the Number?
Here are a few factors driving EMSI’s predicted jobs number:
Real GDP grew 2.6% in the fourth quarter, according to the advanced estimate, which, after the third quarter’s spectacular 5% rate, was below what economists had been expecting.
Personal income increased during December by 0.3%, a slight decrease from November’s 0.4% growth rate.
Initial unemployment claims decreased more than 8,000 last week, but the four-week seasonally adjusted average increased around 4,250 from the previous month.
How Have We Performed?
We launched the forecast in August 2014, but we’ve been tracking our model’s performance since we developed it in the summer of 2013. How have we fared?
BLS-EMSI Comparison (In Thousands)
BLS InitialBLS RevisedEMSIJuly_1316289155August_13169238156September_13148175203October_13204200163November_13203274228December_137484199January_14113144160February_14175222165March_14192203193April_14288304263May_14217229229June_14288267237July_14209243241Aug_14142203236September_14248271185October_14214261247November_14321353233December_14252300
Since July 2013, EMSI’s average error is +/- 42,800 compared to the first BLS release and +/- 46,100 compared to the BLS revised number.
Our Approach
The EMSI Job Forecast is calculated using a time series of leading indicators from federal data sources. Our model includes data on initial job claims from the Department of Labor, various economic indices, and employment data from the Bureau of Labor Statistics. The job forecast covers total non-farm payroll employment in the U.S., including private-sector and government jobs. EMSI’s goal is to predict the BLS’s change in employment in the most accurate way, with an eye toward the preliminary monthly figure and the final number.
Note: Our monthly job forecast methodology is not related in any way to our approach to producing quarterly employment projections by industry and occupation.
About EMSI
Emsi turns labor market data into useful information that helps organizations understand the connection between economies, people, and work. Using sound economic principles and good data, we build user-friendly services that help educational institutions, workforce planners, and regional developers (such as workforce boards, economic development offices, chambers of commerce, and utilities) build a better workforce and improve the economic conditions in their regions.
For more information on labor market data and trends, visit EMSI’s blog (https://economicmodeling.com/blog/) or email Joshua Wright (jwright@economicmodeling.com).
